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20 April, 14:27

The following information pertains to Ceil Co., a company whose common stock trades in a public market: Shares outstanding at 1/1 100,000 Stock dividend at 3/31 24,000 Stock issuance at 6/30 5,000 What is the weighted-average number of shares Ceil should use to calculate its basic earnings per share for the year ended December 31?

a. 129,000

b. 120,500

c. 126,500

d. 123,000

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  1. 20 April, 17:47
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    c. 126,500

    Explanation:

    The computation of the weighted-average number of shares is shown below:

    = Shares outstanding + Stock dividend + Stock issuance

    = $100,000 + $24,000 + $2,500

    = $126,500

    The stock issuance would be

    = $5,000 * 6 months : 12 months

    = $2,500

    The 6 months is calculated from January 1 to June 30

    The stock dividend is to be outstanding at the beginning year i. e January 1
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